Burnham Holdings, Inc. Announces First Half Results And Declares Dividend

LANCASTER, Pa., July 19, 2012 /PRNewswire/ -- Burnham Holdings, Inc., (Pink Sheets: BURCA), the parent company of fourteen subsidiaries that are leading domestic manufacturers of boilers, and related HVAC products and accessories (including furnaces, radiators, and air conditioning systems), for residential, commercial and industrial applications, today reported its consolidated financial results for the period ended July 1, 2012, and announced a common stock dividend.

Second quarter and year-to-date ("YTD") sales were $41.4 million and $78.0 million, respectively; as compared to 2011 second quarter and YTD sales of $40.0 million and $76.3 million, respectively.  These improved 2012 results continue the upward year on year sales trend Burnham Holdings experienced in the first quarter.  This is encouraging in light of the current weak and unsettled economic conditions that have impacted the overall boiler and furnace industry. With a firm foundation based on our core principles and philosophy, Burnham Holdings is financially and operationally strong.  Existing boilers will continue to be replaced over time due to age or operating costs, and our powerful lineup of high-efficiency residential and commercial products positions us well in the market.  We produce top-quality, high-value equipment for virtually any application.  As we approach the upcoming heating season, we are scheduling our manufacturing facilities for the normal pattern of higher demand in the second half. 

We are reporting a second quarter gain of $181 thousand or $0.04 per share, and a YTD loss of $(766) thousand or $(0.17) per share (both results are the best for the Company since 2007).  These results compare favorably to 2011 quarter and YTD losses of $(31) thousand or $(0.01) per share, and $(1,015) thousand or $(0.23) per share, respectively.  YTD cost of goods sold ("COGS") as a percentage of sales for 2012 was 79.7%, better than last year's first half of 79.9% (the percentages for the second quarters were identical at 78.8%).  This COGS percentage improvement reflects our efforts to continually and systematically match our product pricing and cost structure to remain competitive in the market, while maintaining our gross profit margins.  YTD selling, administrative, and general ("SG&A") expenses were slightly higher than the prior year in dollars, $16.4 million versus $16.3 million in 2011, but were lower as a percentage of sales (21.0% compared to 21.3%).  For the quarter, 2012 SG&A was lower in both dollars and as a percentage.  Our interest expense for the quarter and YTD was basically equal to the prior year.

The Company's balance sheet has appropriate levels of working capital consistent with current business activity.  Our long-term debt of $31.7 million was comprised of $29.0 million of bank debt ($3.5 million lower than last year with Cash also being $500 thousand higher than last year) and $2.7 million of interest rate derivatives.  The Statement of Cash Flows presents less net cash being used in operations at $12.7 million compared to prior year's cash used of $15.7 million, reflecting the Company's stable balance sheet and spending directives.

At its meeting on July 19, 2012, Burnham Holdings, Inc.'s Board of Directors declared a quarterly common stock dividend of $0.18 per share payable August 28, 2012, with a record date of August 21, 2012.  


 

Consolidated Statements of Operations


(In thousands, except per share data)

Three months ended


Six months ended

(Data is unaudited (see Notes))

July 1,

June 26,


July 1,

June 26,


2012

2011


2012

2011

Net sales

$ 41,386

$ 40,049


$ 77,983

$ 76,324

Cost of goods sold

32,608

31,572


62,139

61,019

    Gross profit

8,778

8,477


15,844

15,305







Selling, administrative and general expense

8,149

8,163


16,392

16,256

Operating income (loss)

629

314


(548)

(951)







Other income (expense)






    Mark-to-market gain (4)

35

37


63

110

    Interest income

7

2


22

2

    Interest expense

(388)

(400)


(733)

(746)

        Other income (expense)

(346)

(361)


(648)

(634)







Gain (loss) before taxes

283

(47)


(1,196)

(1,585)

Income tax expense (benefit)

102

(16)


(430)

(570)







Net gain (loss)

$ 181

$ (31)


$ (766)

$ (1,015)







Per Share Data:






    Basic & Diluted gain (loss)

$ 0.04

$ (0.01)


$ (0.17)

$ (0.23)

    Dividends paid

$ 0.18

$ 0.17


$ 0.36

$ 0.34

Notes:

1)  The accompanying unaudited financial statements contain adjustments that are necessary for a fair presentation of the interim results, and these adjustments are applied consistently for the periods presented.  The results for any interim period are not necessarily indicative of results for the full year.  These consolidated financial statements should be read in conjunction with the Annual Report for the period ended December 31, 2011.  Statements other than historical facts included or referenced in this Report are forward-looking statements subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected.  We undertake no duty to update or revise these forward-looking statements. 

2)  Basic earnings per share are based upon weighted average shares outstanding for the period. Diluted earnings per share assume the conversion of outstanding rights into common stock. 

3)  Common stock outstanding at July 1, 2012 includes 2,959,575 of Class A shares and 1,522,959 of Class B shares.

4)  Mark-to-market adjustments are a result of changes (non-cash) in the fair value of interest rate agreements.  These agreements are used to exchange the interest rate stream on variable rate debt for payments indexed to a fixed interest rate.  These non-operational, non-cash charges reverse themselves over the term of the agreements.

5)  Accounting rules require that the funded status of pension and other postretirement benefits be recognized as a non-cash asset or liability, as the case may be, on the balance sheet of the Company.  For December 31, 2011 and 2010, projected benefit obligations exceeded plan assets.  The resulting non-cash presentation on the balance sheet is reflected in "Deferred income taxes",  "Other postretirement liabilities", and "Accumulated other comprehensive income (loss)", a non-cash sub-section of "Stockholders' Equity" (see Note 10 of the 2011 Annual Report for more details).

6)  In the first half of 2012 and 2011, the Company made voluntary pre-tax contributions of $2.5 million and $1.9 million, respectively, to its defined pension plan.  These payments increased the trust assets available for benefit payments (reducing "Other postretirement liabilities") and did not impact the Statement of Operations.

Consolidated Balance Sheets

July 1,


June 26,

(In thousands and data is unaudited (see Notes))

2012


2011

ASSETS




Current Assets




    Cash, cash equivalents, and marketable securities

$ 5,084


$ 4,547

    Trade and other accounts receivable, net

20,600


21,511

    Inventories

52,266


52,534

    Prepayments and other current assets

3,416


3,669

        Total current assets

81,366


82,261

Property, plant and equipment, net

48,541


50,222

Deferred income taxes (5)

3,300


---

Other assets, net

22,353


22,090

        Total Assets

$ 155,560


$ 154,573





LIABILITIES AND STOCKHOLDERS' EQUITY




Current Liabilities




    Accounts and taxes payable & accrued expenses

$ 24,521


$ 25,458

    Current portion of long-term liabilities

357


305

        Total current liabilities

24,878


25,763

Long-term debt

31,681


34,112

Other postretirement liabilities (5)(6)

36,826


21,488

Deferred income taxes (5)

---


1,757

Stockholders' equity




    Preferred stock

530


530

    Class A common stock

3,418


3,341

    Class B convertible common stock

1,523


1,585

    Additional paid-in capital

14,722


14,513

    Retained earnings

93,917


91,731

    Accumulated other comprehensive income (loss) (5)

(33,977)


(22,289)

    Treasury stock, at cost

(17,958)


(17,958)

        Total stockholders' equity

62,175


71,453

        Total Liabilities and Stockholders' Equity

$ 155,560


$ 154,573





Consolidated Statements of Cash Flows

July 1,


June 26,

(In thousands and data is unaudited)

2012


2011

    Net loss

$ (766)


$ (1,015)

    Depreciation and amortization

2,338


2,116

    Other net adjustments

(784)


(1,416)

    Pension and postretirement liabilities expense

611


498

    Contributions to pension trust (6)

(2,513)


(1,875)

    Changes in operating assets and liabilities

(11,609)


(14,043)

Net cash used in operating activities

(12,723)


(15,735)

Net cash used in the purchase of assets

(734)


(2,313)

Proceeds from borrowings

15,500


20,000

Principal payments on debt and lease obligations

(57)


(18)

Proceeds from exercise of stock options

229


175

Dividends paid

(1,620)


(1,527)

Cash, cash equivalents, and marketable securities:




    Increase for period

595


582

    Beginning of year

4,489


3,965

    End of period

$ 5,084


$ 4,547

 

SOURCE Burnham Holdings, Inc.



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